Q1
INTERIM REPORT
JANUARY–MARCH 2017
INTERIM REPORT JANUARY–MARCH 2017: Strong quarter – net sales and
comparable EBITA grew
First quarter 2017 in brief:
-
Net sales increased by 3.3% to EUR 306.2 million (Q1 2016: 296.2)
1)
Comparable net sales increased by 4.8%
2)
Comparable EBITA increased by 28% to EUR 32.0 million (25.0)
EBITA increased to EUR 30.9 million (26.8)
Cash flow from operating activities before financial items and taxes amounted to EUR -46.4 million (-36.2)
3)
Earnings per share (EPS) were EUR 1.07 (0.01). Operative earnings per share totaled EUR 0.19 (0.10)
Outlook for 2017 unchanged:
Fiskars expects the Group’s net sales, excluding the net sales of businesses divested in 2016 (2016: EUR 1,180 million)
and comparable EBITA (2016: EUR 107 million) to increase from the previous year.
Interim President and CEO, Fiskars, Teemu Kangas-Kärki:
“Fiskars Group had a strong start to the year, with increased net sales and comparable EBITA. The Functional segment
net sales grew in all geographies, and both Living and Functional segments delivered solid results, as the comparable
EBITA nearly doubled in the Living segment and grew by 17% in the Functional segment.
The solid first quarter was supported by favorable weather conditions and strong sell-in in the gardening category, the
timing of spring campaigns as well as our improved cost structure. In addition, we have succeeded in winning big
customer accounts, thanks to our in-store excellence, presence in several markets and customer focus. Inspiring
consumers with a family of iconic lifestyle brands is at the core of our business and several of our brands, Fiskars, Royal
Copenhagen, Arabia, Gilmour, and Royal Doulton demonstrated double digit growth.
I am pleased with the excellent performance in the Scandinavian Living and Functional businesses, reflecting the
persistent work and focus our team has manifested over time. During the first quarter, we continued to see the benefits of
the transformation programs that have been initiated during the past few years. The solid results speak of our ability to
create value, generate growth with our strong brands and drive operational efficiencies.
The trade continued to face lower traffic in traditional channels, especially in department stores, as consumers continued
to move to online and e-commerce platforms across various categories in the Living business. Building omni-channel
capabilities with our trade partners, in own retail and digital channels is a strategic priority and we continue to invest in ecommerce to increase net sales in these channels.
Our long-term financial targets, shared earlier this year, outline the ambition level as we determinedly pursue continued
profitable growth. The new organization structure with two Strategic Business Units and a global supply chain will help us
in increasing cohesion and alignment, both of which we need in order to build global businesses and brands.
Fiskars has a family of globally recognized brands, including Fiskars, Gerber, Iittala, Royal Copenhagen, Waterford, and
Wedgwood, a clear purpose to make the everyday extraordinary, and a strong balance sheet that provides us the
flexibility to invest in opportunities that can create sustainable value for our stakeholders.”
1)
2)
3)
Using comparable exchange rates, excluding Spring USA (divested in September 2016) and the container gardening businesses in the U.S.
(divested in January 2016) and Europe (divested in December 2016)
Items affecting comparability include items such as restructuring costs, impairment or provisions charges and releases, integration related
costs, and gain and loss from the sale of businesses
Operative earnings per share do not include net changes in the fair value of the investment portfolio and dividends received
Q1 2017 | 1
Group key figures
EUR million
Q1 2017
Q1 2016
Change
2016
Net sales
306.2
296.2
3.3%
1,204.6
Comparable net sales1)
304.5
290.6
4.8%
1,179.5
30.9
26.8
15%
96.7
EBITA
Items affecting comparability in EBITA
2)
-1.1
1.8
Comparable EBITA
32.0
25.0
28%
107.1
Operating profit (EBIT)
27.4
23.7
16%
82.7
Net change in the fair value of investment portfolio
81.3
-25.7
6.1
Profit before taxes
114.4
3.2
92.8
Profit for the period
88.2
1.5
65.4
Operative earnings/share, EUR
0.19
0.10
Earnings/share, EUR
1.07
0.01
Equity per share, EUR
14.92
13.83
8%
14.91
Cash flow from operating activities before financial items and taxes
-46.4
-36.2
28%
120.7
Equity ratio, %
66%
64%
69%
Net gearing, %
21%
27%
12%
3)
Capital expenditure
Personnel (FTE), average
-10.4
84%
0.56
0.78
7.4
8.2
-10%
37.6
7 834
8 092
-3%
8 000
1) Using comparable exchange rates, excluding Spring USA (divested in September 2016) and the container gardening businesses in the U.S. (divested in
January 2016) and Europe (divested in December 2016)
2) In Q1 2017, items affecting comparability include costs related to the Alignment program and the sale of Spring USA. In Q1 2016, a gain from the sale of
the boats business and the container gardening business in the Americas as well as net costs related to the Supply Chain 2017 program and Alignment
program.
3) Excluding net change in the fair value of the investment portfolio and dividends received. The comparison period has been restated to also exclude the
exchange rate gains related to the investment portfolio.
IMPACT OF ESMA GUIDELINES
In accordance with the guidelines on alternative performance measures issued by the European Securities and Markets Authority
(ESMA) Fiskars Corporation has revised the terminology used in its financial reporting. Alternative Performance Measures (APM) are
used to better reflect the operational business performance and to facilitate comparisons between financial periods. APMs should not be
considered substitutes for measures of performance in accordance with the IFRS. As of Q1 2017, the term “adjustments” has been
changed to the term “items affecting comparability (IAC)”, however the definition remains the same. As before, items affecting
comparability are transactions that are not related to recurring business operations, such as restructuring costs, impairment charges,
integration related costs, and the gain or loss from the sale of businesses. Correspondingly, “comparable EBITA” is calculated from
comparable EBIT by adding back amortization. The items affecting comparability are listed in a table on page 15 of this interim report.
Fiskars also uses the APM “operative EPS”, which is earnings per share (EPS) excluding the effects of the dividends from and the
change in the fair value of the investment portfolio.
Q1 2017 | 2
INTERIM REPORT, JANUARY–MARCH 2017
GROUP PERFORMANCE
Comparable
EUR million
Net sales
Q1 2017
Q1 2016
Change
change*
2016
Group
306.2
296.2
3.3%
4.8%
1,204.6
Living
129.2
128.9
0.3%
2.2%
598.1
Functional
176.0
166.4
5.8%
6.8%
602.7
0.9
0.9
-5.2%
3.8
Group
32.0
25.0
28%
107.1
Living
7.2
3.7
95%
59.4
Functional
26.8
23.0
17%
57.1
Other
-2.1
-1.7
24%
-9.5
Other
Comparable EBITA
* Using comparable exchange rates, excluding Spring USA (divested in September 2016) and the container gardening businesses in the U.S. (divested in
January 2016) and Europe (divested in December 2016)
Fiskars Group’s consolidated net sales increased by 3.3% to EUR 306.2 million (Q1 2016: 296.2, which included EUR
9.9 million from divested businesses), driven by the Functional business in all geographies. Comparable net sales
increased by 4.8%, supported by both Functional and Living businesses.
The comparable EBITA, i.e. excluding any items affecting comparability (IAC), increased by 28% to EUR 32.0 million
(25.0). Items affecting comparability in EBITA amounted to EUR -1.1 million (1.8) and were related mainly to the costs
from the Alignment program, which was announced in November 2016. Fiskars Group’s first quarter EBITA totaled EUR
30.9 million (Q1 2016: 26.8).
OPERATING ENVIRONMENT
The operating environment remained stable in Europe, with consumer confidence showing a slight increase in the key
markets. Economic indicators recovered despite the uncertain political environment in some European markets.
Consumer confidence remained strong in the U.S., although the pace of economic growth slowed down in the region.
The wholesale channel faced challenges especially in the tableware category, but the building and fixing categories grew
in the U.S. The brick and mortar retail continued to encounter store closures during the first quarter.
After a period of decline, the economic sentiment showed modest improvement in Japan, benefitting from increased
tourism. Consumer confidence declined in Australia.
REPORTING SEGMENTS
This interim report reflects Fiskars’ organizational structure that features two Strategic Business Units (SBU): Living and
Functional. As of January 1, 2017 Fiskars Group’s three primary reporting segments are Living, Functional and Other. In
addition, Fiskars reports group-level net sales for three geographical areas: Europe, Americas, and Asia-Pacific.
SBU Living offers premium and luxury products for tabletop, giftware and interior décor. It consists of the English &
Crystal Living and Scandinavian Living businesses. English & Crystal Living business includes brands such as
Waterford, Wedgwood, Royal Albert, and Royal Doulton. Scandinavian Living business includes brands such as Iittala,
Royal Copenhagen, Rörstrand, and Arabia.
SBU Functional provides tools for use in and around the house as well as outdoors, and consists of brands such as
Fiskars, Gerber, and Gilmour.
The Other segment contains the Group’s investment portfolio, the real estate unit, corporate headquarters and shared
services.
Q1 2017 | 3
Living segment in Q1 2017
EUR million
Q1 2017
Q1 2016
Change
2016
129.2
128.9
0.3%*
598.1
Comparable EBITA
7.2
3.7
95%
59.4
Capital expenditure
2.0
3.0
-36%
14.9
Net sales
* Using comparable exchange rates and excluding the net sales of the divested Spring USA, net sales in the Living segment increased by 2.2% in Q1 2017
Net sales in the Living segment remained at last year’s level and amounted to EUR 129.2 million (Q1 2016: 128.9).
Comparable net sales increased by 2.2%. Net sales in the Scandinavian Living business increased, supported by the
performance of the Arabia, Royal Copenhagen and Iittala brands. The positive reception to the Finland 100 anniversary
products supported net sales in Finland.
Net sales in the English & Crystal Living business remained at last year’s level, excluding the divested Spring USA. Net
sales in the direct e-commerce continued to grow. In addition, net sales to hospitality customers increased.
Comparable EBITA for the Living segment increased by 95% and totaled EUR 7.2 million (3.7), driven mainly by the
operational performance of the Scandinavian Living business.
Marketing highlights in Q1 2017
The Ambiente fair in Frankfurt, Germany marked an important milestone for the Living business in February, as the
English & Crystal Living and Scandinavian Living brands joined forces and the entire Living portfolio was presented to
customers for the first time. Close collaboration between the Scandinavian Living and English & Crystal Living
businesses is expected to strengthen the impact and efficiency of joint marketing activities towards the trade customers.
After the successful introduction of the partnership between Royal Doulton and the world renowned television host and
entrepreneur Ellen DeGeneres, the tableware collection was launched globally during the first quarter of 2017.
Iittala launched a new global range “Teema Tiimi” to complement the classic “Teema” tableware. The range includes
bowls and plates for Eastern and Western dishes. The full collection is available in the Asian market and on the Iittala
webstore in the EU.
Functional segment in Q1 2017
EUR million
Q1 2017
Q1 2016
Change
2016
176.0
166.4
5.8%*
602.7
Comparable EBITA
26.8
23.0
17%
57.1
Capital expenditure
4.3
4.6
-6%
21.8
Net sales
* Using comparable exchange rates and excluding the net sales of the divested container gardening businesses in the U.S and Europe, net sales in the
Functional segment increased by 6.8% in Q1 2017
Net sales in the Functional segment increased by 5.8% to EUR 176.0 million (Q1 2016: 166.4) in all geographies.
Comparable net sales increased by 6.8%, supported by spring campaigns, new product launches in Europe, and the
yardcare and hardware tool categories in the Americas. In addition, big customer accounts generated increased sales.
The net sales of all main brands, Fiskars, Gerber, and Gilmour increased.
Comparable EBITA for the Functional segment increased by 17% and amounted to EUR 26.8 million (23.0), driven by
the EMEA and Americas businesses. The profitability of the watering category continued to increase in the U.S, reflecting
the turnaround progressing faster than originally planned.
Marketing highlights in Q1 2017
In January, Fiskars Waterwheel received an honorary mention in the Fennia Prize awards. The Fennia Prize, Finland's
biggest design competition for companies and organizations, recognizes exemplary use of design in both designing and
realizing products, services, business processes or concepts.
Q1 2017 | 4
Gerber participated in the Shot Show in January, the single largest sporting goods trade event in America. A renewed
presence and number of PR events increased traffic at the show and helped reposition the brand around the expanded
“Made In America” product offering.
th
In February, the 50 anniversary celebrations of Fiskars iconic orange handled scissors were launched at the Ambiente
fair in Germany, driving growth in the scissors category in Europe.
In March, Fiskars joined with the National Collegiate Athletic Association (NCAA) in the U.S. for the ninth consecutive
year as the official net-cutting scissors during the 2017 NCAA Men’s and Women’s Basketball Championships.
Other segment in Q1 2017
EUR million
Net sales
Q1 2017
Q1 2016
Change
2016
0.9
0.9
-5.2%
3.8
24%
-9.5
Comparable EBITA
-2.1
-1.7
Net change in fair value of investments valued at FVTPL*
81.3
-25.7
545.7
494.3
10%
464.4
1.2
0.6
96%
0.9
Investments at FVTPL*
Capital expenditure
6.1
* FVTPL = Fair value through profit or loss
Net sales in the Other segment decreased by 5.2% to EUR 0.9 million (Q1 2016: 0.9), and consisted of timber sales and
rental income. The comparable EBITA for the Other segment amounted to EUR -2.1 million (-1.7). The investments and
net change in the fair value of investments through profit or loss is explained in more detail under the heading Financial
items and net results.
Net sales by geography
Q1 2017
Q1 2016
Change
Comparable
change*
2016
Europe
139.2
135.0
3.1%
6.9%
555.3
Americas
129.7
128.8
0.7%
0.6%
489.9
35.8
33.0
8.5%
2.5%
153.3
1.5
-0.6
EUR million
Asia-Pacific
Unallocated**
6.2
* Using comparable exchange rates, excluding the divested container gardening businesses in the U.S and Europe, and Spring USA.
** Geographically unallocated exchange rate differences
Net sales in Europe increased by 3.1% and amounted to EUR 139.2 million (Q1 2016: 135.0). Comparable net sales
increased by 6.9%, driven by the Functional business. Weather conditions were favorable in Central Europe, contributing
to the sale of garden products.
Net sales in Americas increased by 0.7% to EUR 129.7 million (128.8). Comparable net sales increased by 0.6%, driven
by the Functional business, while the Living business faced challenges due to the distribution channels.
Net sales in Asia-Pacific increased by 8.5% and amounted to EUR 35.8 million (33.0). Comparable net sales increased
by 2.5%, driven by the Scandinavian Living business.
Research and development
The Group’s research and development expenditure totaled EUR 4.6 million (Q1 2016: 4.4) in the first quarter of 2017,
equivalent to 1.5% (1.5%) of net sales.
Personnel
The average number of full-time equivalent employees (FTE) was 7,834 (Q1 2016: 8,092) in the first quarter. At the end
of the quarter, the Group employed 8,497 (8,704) employees, of whom 1,192 (1,320) were in Finland. The year-on-year
decrease was mainly due to the divestments.
Q1 2017 | 5
Fiskars’ transformation process
With the vision to create a positive, lasting impact on the quality of life we live – making the everyday extraordinary,
Fiskars is on a transformation journey to become an integrated consumer goods company with a family of iconic lifestyle
brands. The company took steps during the first quarter of 2017 to move this process forward.
Alignment program
In November 2016, Fiskars launched an Alignment program to proceed in the transformation. The program focuses on
the structural changes in the organization, proposed headcount reductions, and the full integration of the English &
Crystal Living business, acquired in 2015. The net headcount reduction was estimated to be 130 positions globally.
The total costs of the program are approximately EUR 15 million in 2016–2017. They are recorded as items affecting
comparability in EBITA, of which EUR 9.4 million had been recorded by the end of first quarter of 2017. The targeted
annual cost savings are approximately EUR 14 million, subject to the full implementation of the program. The targeted
cost savings will be achieved gradually, starting in 2017 and with the full effect in 2018.
Supply Chain 2017 program
During the third quarter of 2015, Fiskars announced a restructuring program to optimize its global supply chain network
in Europe and Asia. The Supply Chain 2017 program aims to improve the competitiveness of Fiskars’ manufacturing
operations and distribution network.
The total costs of the program are approximately EUR 20 million between 2015 and 2017. They are reported as items
affecting comparability in EBITA, of which EUR 11.1 million had been recorded by the end of first quarter of 2017. The
targeted annual cost savings are approximately EUR 8 million, subject to the full implementation of the program. The
targeted cost savings will be achieved gradually, and the majority of the savings are expected to materialize in the
Group’s results after the program has been completed. The program is expected to be completed by the end of 2017.
Financial items and net result
Financial items and net result in Q1 2017
Along with the rest of the Group’s active investments, shares in Wärtsilä Corporation are treated as financial assets at
fair value through profit or loss, which increases the volatility of Fiskars’ net results. At the end of the first quarter of 2017,
Fiskars owned 10,881,781 shares in Wärtsilä, representing 5.52% of Wärtsilä’s share capital.
The net change in the fair value of investments through profit or loss amounted to EUR 81.3 million (Q1 2016: -25.7)
during the first quarter of 2017. The change in the market value of the company’s holdings in Wärtsilä amounted to EUR
81.3 million (-25.9) in the first quarter of 2017, with the closing price of Wärtsilä shares being EUR 50.15 at the end of
March.
Other financial income and expenses amounted to EUR 5.5 million (5.8) in the first quarter of 2017, including EUR 7.1
million (13.1) of the first instalment of the dividend received on Wärtsilä shares and EUR -0.1 million (-3.5) of foreign
exchange differences. The second instalment of the Wärtsilä dividend will be received in September 2017.
Profit before taxes was EUR 114.4 million (3.2) in the first quarter of 2017. Income taxes for the first quarter were EUR
26.2 million (1.7), mainly due to the change in the market value of the Wärtsilä holding. Earnings per share were EUR
1.07 (0.01). Operative earnings per share, excluding the net change in the fair value of the investment portfolio and
dividends received were EUR 0.19 (0.10). The comparison period figure for operative earnings per share has been
restated to also exclude the exchange rate gains related to the investment portfolio.
Cash flow, balance sheet, and financing
Cash flow, balance sheet, and financing in Q1 2017
The first-quarter cash flow from operating activities before financial items and taxes amounted to EUR -46.4 million (Q1
2016: -36.2). The decrease was mainly due to an increase in trade receivables at the end of the first quarter of 2017,
which was a result of customer mix and higher net sales in March. Cash flow from financial items and taxes amounted to
EUR -6.3 million (2.7). Cash flow from investing activities was EUR 0.2 million (27.4). Cash flow from financing activities
was EUR 48.7 million (11.5), the change being mainly due to sale of other current investments and increase in current
debt.
Q1 2017 | 6
Capital expenditure for the first quarter totaled EUR 7.4 million (8.2), mainly relating to replacements. Depreciation,
amortization and impairment were EUR 9.3 million (8.9) in the first quarter.
Fiskars’ working capital totaled EUR 258.1 million (238.8) at the end of March. The increase in working capital is
primarily due to the increase in income tax receivables related to the tax reassessment decision (EUR 28.3 million) as
well as increased trade receivables, primarily a result of higher business volume. The equity ratio increased to 66%
(64%) and net gearing was 21% (27%). Cash and cash equivalents at the end of the period totaled EUR 14.0 million
(24.5). Net interest-bearing debt amounted to EUR 256.8 million (307.0). In addition, the shares in Wärtsilä were valued
at EUR 545.7 million (432.8) at the end of the period.
Short-term borrowing totaled EUR 90.2 million (150.9) and long-term borrowing totaled EUR 181.8 million (181.9). Shortterm borrowing mainly consisted of commercial papers issued by Fiskars Corporation. In addition, Fiskars had EUR
300.0 million (300.0) in unused, committed long-term credit facilities with Nordic banks.
Changes in organization and management
On February 10, 2017 Fiskars appointed Sari Pohjonen, M.Sc. (Econ) as Chief Financial Officer of Fiskars Group and a
member of the Executive Leadership Team.
On February 15, 2017 Kari Kauniskangas, President and CEO of Fiskars Corporation, announced his resignation from
the position. The Board of Directors appointed Teemu Kangas-Kärki, the deputy to the CEO and Fiskars’ Chief Operating
Officer, as interim President and CEO. At the same time, the Board of Directors started the recruitment process to select
a new President and CEO for the company.
On March 31, 2017 Fiskars appointed Paul Tonnesen, MBA, B.Sc. (Marketing) as President, SBU Functional and a
member of the Executive Leadership Team.
Other significant events during the reporting period
On February 8, 2017 Fiskars established long-term financial targets that cover four areas: growth, profitability, capital
structure and dividend:
•
•
•
•
Growth: The average annual net sales growth to exceed 5%, through a combination of organic growth and
targeted acquisitions
Profitability: EBITA margin to exceed 10%
Capital structure: Net gearing* below 100%
Dividend: Fiskars aims to distribute a stable, over time increasing dividend, to be paid biannually
* Net gearing ratio is the ratio of interest-bearing debt, less interest-bearing receivables and cash and bank equivalents, divided by total equity
Annual General Meeting 2017
The Annual General Meeting of shareholders of Fiskars Corporation was held on March 9, 2017. The Annual General
Meeting approved the financial statements for 2016 and discharged the members of the Board and the President and
CEO from liability. The Annual General Meeting decided in accordance with the proposal by the Board of Directors to pay
dividend of EUR 1.06 per share for the financial period that ended on December 31, 2016. The dividend will be paid in
two instalments. The first instalment of EUR 0.71 per share was paid on March 20, 2017.
The second instalment of EUR 0.35 per share will be paid in September 2017. The second instalment will be paid to a
shareholder who is registered in the shareholders’ register of the company maintained by Euroclear Finland Ltd on the
dividend record date, which, together with the payment date, shall be decided by the Board of Directors in its meeting
scheduled for September 7, 2017. The dividend record date for the second instalment would be September 11, 2017 and
the dividend payment date September 18, 2017, at the latest.
The Annual General Meeting decided that the Board of Directors shall consist of ten members. Paul Ehrnrooth,
Alexander Ehrnrooth, Ingrid Jonasson Blank, Louise Fromond, Gustaf Gripenberg, Jyri Luomakoski, Inka Mero, Fabian
Månsson, Peter Sjölander and Ritva Sotamaa were re-elected. The term of the Board members will expire at the end of
the Annual General Meeting in 2018. KPMG Oy Ab was elected as auditor for the term that will expire at the end of the
Annual General Meeting in 2018. KPMG Oy Ab has announced that the responsible auditor will be Virpi Halonen,
Authorized Public Accountant.
Q1 2017 | 7
The Annual General Meeting decided to authorize the Board to decide on the acquisition of a maximum of 4,000,000
own shares, in one or several instalments, using the unrestricted shareholders' equity of the company. The company’s
own shares may be acquired in public trading on Nasdaq Helsinki Ltd at a price formed in public trading on the date of
the acquisition. The authorization may be used to acquire shares to be used for the development of the capital structure
of the company, as consideration in corporate acquisitions or industrial reorganizations and as part of the company’s
incentive system and otherwise for further transfer, retention or cancellation. The Board of Directors is authorized to
decide on all other terms and conditions regarding the acquisition of the company’s own shares. Based on the
authorization the acquisition of the company’s own shares may be made otherwise than in proportion to the share
ownership of the shareholders (directed acquisition).
The Annual General Meeting decided to authorize the Board to decide on the transfer of own shares (share issue) held
as treasury shares of a maximum of 4,000,000 shares, in one or several instalments, either against or without
consideration. The company’s own shares held as treasury shares may be transferred for example as consideration in
corporate acquisitions or industrial reorganizations or for the development of the capital structure of the company, or as
part of its incentive system. The Board of Directors is authorized to decide on all other terms and conditions regarding
the transfer of own shares held as treasury shares. The transfer of own shares may also be carried out in deviation from
the shareholders’ pre-emptive rights to the company’s shares (directed issue).
The authorizations are effective until June 30, 2018 and cancel the corresponding authorizations granted to the Board by
the Annual General Meeting on March 9, 2016.
Constitutive meeting of the Board and Board Committees
Convening after the Annual General Meeting held on March 9, 2017 the Board of Directors elected Paul Ehrnrooth as its
Chairman and Alexander Ehrnrooth as the Vice Chairman. The Board decided to establish an Audit Committee, a
Compensation Committee and a Nomination Committee. The Board appointed Jyri Luomakoski (Chairman), Alexander
Ehrnrooth, Louise Fromond, Gustaf Gripenberg and Ritva Sotamaa as members of the Audit Committee. Paul Ehrnrooth
(Chairman), Ingrid Jonasson Blank, Inka Mero and Peter Sjölander were appointed as the members of the
Compensation Committee. The Board appointed Paul Ehrnrooth (Chairman), Alexander Ehrnrooth and Fabian Månsson
as the members of the Nomination Committee.
Shares and shareholders
Fiskars Corporation has one share series (FSKRS; until January 1, 2017: FIS1V). All shares carry one vote and equal
rights. The number of shares in the Corporation totals 81,905,242. Fiskars Corporation held 191,467 of its own shares at
the end of the quarter. The share capital remained unchanged at EUR 77,510,200.
Fiskars shares are traded in the Large Cap segment of Nasdaq Helsinki. The average share price during the first quarter
was EUR 19.23 (Q1 2016: 17.32). At the end of March, the closing price was EUR 19.37 (EUR 17.26) per share and
Fiskars had a market capitalization of EUR 1,582.8 million (1,413.5). The number of shares traded on Nasdaq Helsinki
and in alternative market places from January to March was 1.0 million (0.8), which represents 1.2% (0.9%) of the total
number of shares.
The total number of shareholders was 19,087 (18,698) at the end of March 2017.
Flagging notifications
Fiskars was not informed of significant changes among its shareholders during the quarter.
Risks and business uncertainties
Fiskars’ business, net sales, and financial performance may be affected by several uncertainties. Fiskars Group has
detailed the overall business risks and risk management in its Annual Report and on the company’s website
www.fiskarsgroup.com/investors.
Fiskars Group entities are subject to tax audits in several countries. It is possible that tax audits may lead to
reassessment of taxes. In July 2016 Fiskars received a tax reassessment decision from the Finnish Large Taxpayers’
Office, which obliged the company to pay a total of EUR 28.3 million in additional tax, interest expenses and punitive tax
increases as a result of a tax audit carried out in 2014. Fiskars and its external advisors consider the decision unfounded
and did not recognize the related taxes and other costs in the income statement. Fiskars has appealed the decision to
the Board of Adjustment in the Finnish Large Taxpayers' Office. Fiskars will continue the appeal process in court, if
Q1 2017 | 8
necessary, in which case the process may take years. The dispute concerns intra-group loans forgiven by the company
in 2003 and their tax treatment in subsequent tax years.
Otherwise, no new or changed material risks and uncertainty factors have been identified during the quarter.
Events after the reporting period
There were no significant events after the reporting period.
Outlook for 2017
Fiskars expects the Group’s net sales, excluding net sales of businesses divested in 2016 (2016: EUR 1,180 million) and
comparable EBITA (2016: EUR 107 million) to increase from the previous year. The comparable EBITA excludes
restructuring costs, impairment charges, integration related costs, and gain and loss from the sale of businesses.
Fiskars operates globally with a considerable part of the business in the U.S. Translation exposure may have a material
impact on reported financial figures. The fourth quarter is significant both in terms of net sales and profitability.
Fiskars’ Other segment includes investments, which are treated as financial assets at fair value through profit or loss.
This increases the volatility of Fiskars’ financial items and taxes in the profit and loss statement and thus the volatility of
Fiskars’ net results and earnings per share.
Helsinki, Finland, April 27, 2017
FISKARS CORPORATION
Board of Directors
Q1 2017 | 9
CONSOLIDATED INCOME STATEMENT
EUR million
Net sales
Cost of goods sold
Gross profit
Other operating income
Q1
Q1
Change
Q1‒Q4
2017
2016
%
2016
306,2
296,2
3
1 204,6
-173,3
-173,1
0
-701,8
132,8
123,1
8
502,9
0,5
9,1
-94
18,5
Sales and marketing expenses
-75,5
-76,8
-2
-298,3
Administration expenses
-25,6
-26,6
-4
-115,0
-4,6
-4,4
3
-18,0
Research and development costs
Other operating expenses
-0,2
-0,7
-64
-7,4
Operating profit (EBIT)*
27,4
23,7
16
82,7
Change in fair value of biological assets
0,2
-0,6
-0,5
81,3
-25,7
6,1
5,5
5,8
4,4
Profit before taxes
114,4
3,2
92,8
Income taxes
-26,2
-1,7
-27,4
88,2
1,5
65,4
88,0
1,0
64,1
0,1
0,5
1,3
per share, euro (basic and diluted)
1,07
0,01
0,78
*Comparable EBITA (detailed in notes)
32,0
25,0
Investments at fair value through profit or loss - net change in fair value
Other financial income and expenses
Profit for the period
Attributable to:
Equity holders of the parent company
Non-controlling interest
Earnings for equity holders of the parent company
28
107,1
Q1 2017 | 10
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Q1
Q1
Q1‒Q4
EUR million
2017
2016
2016
Profit for the period
88,2
1,5
65,4
-0,8
-2,0
25,1
0,3
-0,4
-0,3
Other comprehensive income for the period
Items that may be reclassified subsequently to profit or loss
Translation differences
Cash flow hedges
Items that will not be reclassified to profit or loss
Defined benefit plan, actuarial gains (losses) net of tax
Other comprehensive income for the period net of tax total
Total comprehensive income for the period
0,5
0,3
-0,3
0,0
-2,1
24,5
88,1
-0,6
89,9
87,9
-1,0
88,5
0,2
0,4
1,4
Attributable to:
Equity holders of the parent company
Non-controlling interest
Q1 2017 | 11
CONSOLIDATED BALANCE SHEET
Mar 31
Mar 31
Change
Dec 31
2017
2016
%
2016
Goodwill
228,9
232,7
-2
229,7
Other intangible assets
294,1
297,8
-1
296,3
Property, plant & equipment
159,1
155,2
3
159,7
41,1
40,8
1
40,9
5,5
4,9
14
4,9
19,9
15,7
27
20,4
8,7
7,9
10
9,7
30,7
37,7
-18
30,2
788,1
792,6
-1
791,7
Inventories
233,2
236,6
-1
224,6
Trade and other receivables
241,9
224,0
8
203,6
35,2
4,3
EUR million
ASSETS
Non-current assets
Biological assets
Investment property
Financial assets
Financial assets at fair value through profit or loss
Other investments
Deferred tax assets
Non-current assets total
Current assets
Income tax receivables
Interest-bearing receivables
Investments at fair value through profit or loss
Cash and cash equivalents
Current assets total
0,0
0,0
545,7
494,3
10
14,0
24,5
-43
17,7
1 070,1
983,7
9
968,3
22,0
464,4
5,6
Non-current assets held for sale
Assets total
35,9
1 858,1
1 782,0
4
1 760,1
1 219,4
1 132,3
8
1 218,1
EQUITY AND LIABILITIES
Equity
Equity attributable to the equity holders of the parent company
Non-controlling interest
2,1
3,4
-37
1,9
1 221,5
1 135,7
8
1 220,1
181,8
181,9
0
182,4
7,9
8,0
-1
9,9
Deferred tax liabilities
70,0
44,4
58
52,7
Pension liability
14,2
13,3
7
14,1
7,2
7,9
-9
7,1
281,1
255,4
10
266,2
Interest-bearing liabilities
90,2
150,9
-40
10,9
Trade and other payables
239,5
209,2
14
237,8
12,7
16,9
-25
8,6
13,2
11,1
19
16,6
355,5
388,1
-8
273,8
4
1 760,1
Equity total
Non-current liabilities
Interest-bearing liabilities
Other liabilities
Provisions
Non-current liabilities total
Current liabilities
Income tax liabilities
Provisions
Current liabilities total
2,7
Liabilities directly associated with the non-current assets held for sale
Equity and liabilities total
1 858,1
1 782,0
Q1 2017 | 12
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million
Q1
Q1
Q1‒Q4
2017
2016
2016
114,4
3,2
92,8
Cash flow from operating activities
Profit before taxes
Adjustments for
Depreciation, amortization and impairment
9,3
8,9
37,4
-0,1
-4,6
-8,2
-81,3
25,7
-6,1
Other financial items
-5,5
-5,8
-4,4
Change in fair value of biological assets
-0,2
0,6
0,5
Change in provisions and other non-cash items
-3,3
-3,7
-20,5
33,3
24,3
91,4
-38,0
-19,5
7,2
-8,6
-5,3
24,0
-33,1
-35,8
-1,9
-46,4
-36,2
120,7
Gain/loss on sale and loss on scrap of non-current assets
Investments at fair value through profit or loss - net change in
fair value
Cash flow before changes in working capital
Changes in working capital
Change in current assets, non-interest-bearing
Change in inventories
Change in current liabilities, non-interest-bearing
Cash flow from operating activities before financial items and taxes
Financial income received and costs paid
-1,3
14,2
23,2
Taxes paid
-5,0
-11,5
-60,2
-52,7
-33,5
83,8
Cash flow from operating activities (A)
Cash flow from investing activities
Acquisition of subsidiaries
Investments in financial assets
Capital expenditure on fixed assets
-7,2
Proceeds from sale of fixed assets
0,4
Proceeds from sale of non-current assets held for sale
-3,8
-6,6
-8,2
-37,6
0,5
2,1
25,8
34,1
Proceeds from sale of subsidiary shares
Proceeds from sale of investments at fair value through profit or loss
Other dividends received
12,0
-0,0
0,0
61,7
7,1
13,1
13,1
Cash flow from other investments
Cash flow from investing activities (B)
0,0
0,2
27,4
78,8
Purchase of treasury shares
-0,1
-0,1
-3,2
Change in current receivables
22,0
0,0
-22,0
15,0
0,0
Repayment of non-current debt
-0,4
-15,9
-0,9
Change in current debt
79,4
64,2
-78,0
Payment of finance lease liabilities
-0,2
-0,2
-1,4
Cash flow from other financing items
-0,2
0,1
0,0
Cash flow from financing activities
Borrowings of non-current debt
Dividends paid
-51,8
-51,6
-58,7
Cash flow from financing activities (C)
48,7
11,5
-164,1
Change in cash and cash equivalent (A+B+C)
-3,8
5,4
-1,5
Cash and cash equivalent at beginning of period
17,7
19,7
19,7
0,0
-0,6
-0,5
14,0
24,5
17,7
Translation difference
Cash and cash equivalent at end of period
Q1 2017 | 13
CONDENSED STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
Attributable to the equity holders of the parent company
Cumul.
Share Treasury transl.
EUR million
Dec 31, 2015
capital
shares
77,5
Total comprehensive income for the period
Fair Actuarial
diff.
reserve
7,3
-1,0
-1,9
-0,4
Changes due to acquisitions
losses earnings
-4,3
1 111,2
0,3
1,0
0,0
Purchase of treasury shares
77,5
-0,1
Total comprehensive income for the period
Purchase of treasury shares
1 194,0
0,4
-0,6
-0,1
0,0
-57,3
-0,2
-57,5
5,5
-1,4
-4,0
1 054,9
3,4
1 135,7
26,9
0,2
-0,6
63,0
1,0
90,5
-0,7
-1,2
-1,8
-3,0
-3,0
Dividend distribution
77,5
-3,2
Total comprehensive income for the period
Purchase of treasury shares
-1,3
-1,3
32,3
-1,2
-4,6
1 117,3
1,9
1 220,1
-0,9
0,3
0,5
88,0
0,2
88,1
-0,1
-0,1
Dividend distribution*
Mar 31, 2017
Total
3,3
-0,1
Changes due to divestments
Dec 31, 2016
interest
-0,1
Dividend distribution
Mar 31, 2016
Non-
value gains and Retained controlling
-86,6
77,5
-3,2
31,5
-0,9
-4,1
1 118,7
-86,6
2,1
1 221,5
*Dividend distribution includes first installment paid in March 2017 and second installment due for payment in September 2017
NOTES TO THE FINANCIAL STATEMENT RELEASE
ACCOUNTING PRINCIPLES
This unaudited interim report is prepared in accordance with IAS 34 (Interim Financial Reporting) using the same accounting policies and
methods of computation as in the previous annual financial statements.
All figures in the accounts have been rounded and consequently the sum of individual figures can deviate from the presented sum figure.
The Group has implemented these new or amended IAS/IFRS standards and interpretations mandatory as of January 1, 2017:
- Annual Improvements to IFRS standards
On 1 January 2018, the Group will adopt IFRS 15 and IFRS 9 and on 1 January 2019, the Group will adopt IFRS 16, providing these are
approved by the EU by the planned date of adoption.
IFRS 15 Revenue from Contracts with Customers. Fiskars expects the standard to cause changes in the accounting principles with certain items,
but material changes in reported figures are not expected as major revenue types will not be significantly affected. The group has evaluated the
effects of the standard and in some instances expects the standard to affect timing of recognizing license and royalty income, services
purchased from customers where distinct services are expected to be separately recognized as selling costs based on fair value of the service
and service-type warranties in circumstances where extra warranties or long guarantee periods are provided by Fiskars.
IFRS 16 Leases The group will continue evaluating the effects of the standard during 2017.
IFRS 9 Financial Instruments and subsequent amendments. Fiskars expects the standard to cause changes in the accounting principles, but
material changes in reported figures are not expected. The group is currently further evaluating the effects of the standard.
The preparation of the financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the
valuation of the reported assets and liabilities and other information, such as contingent liabilities and the recognition of income and expenses in
the income statement. Although the estimates are based on the management’s best knowledge of current events and actions, actual results may
differ from the estimates.
Q1 2017 | 14
REPORTING SEGMENTS
Q1
Q1
Change
Q1‒Q4
2017
2016
%
2016
Living
129,2
128,9
0
598,1
Functional
176,0
166,4
6
602,7
0,9
0,9
-5
3,8
Group total
306,2
296,2
3
1 204,6
Q1
Q1
Change
Q1‒Q4
EUR million
Operating profit (EBIT)
2017
2016
%
2016
5,1
0,7
578
49,0
25,2
20,6
22
40,3
EUR million
Net sales
Other
Living
Functional
Other
-2,8
2,3
-221
-6,7
Group total
27,4
23,7
16
82,7
Living
5,1
5,0
2
20,9
Functional
4,0
3,6
11
15,4
Other
0,2
0,3
-32
1,2
Group total
9,3
8,9
5
37,4
Depreciation, amortization and impairment
Capital expenditure
Living
2,0
3,0
-36
14,9
Functional
4,3
4,6
-6
21,8
Other
1,2
0,6
96
0,9
Group total
7,4
8,2
-10
37,6
Q1
Q1
Change
Q1‒Q4
2017
2016
%
2016
Europe
139,2
135,0
3
555,3
Americas
129,7
128,8
1
489,9
35,8
33,0
9
153,3
1,5
-0,6
346
6,2
306,2
296,2
3
1204,6
NET SALES BY GEORAPHY
EUR million
Net sales
Asia-Pacific
Unallocated
Group total
OPERATING PROFIT AND COMPARABLE EBITA
EUR million
Operating profit (EBIT)
Amortization
EBITA
Items affecting comparability in EBITA
Q1
Q1
Change
Q1‒Q4
2017
2016
%
2016
27,4
23,7
16
-3,5
-3,1
30,9
26,8
Sale of boats business
Supply Chain 2017 program
Sale of container gardening business and related goodwill impairment
Sale of Spring USA
15
-3,8
3,3
4,7
-2,1
-2,1
0,1
-6,0
4,4
1,0
1,3
0,0
-1,4
1,1
-1,8
10,4
32,0
25,0
Other adjustments to operating profit
Total items affecting comparability in EBITA
Comparable EBITA
96,7
-4,3
Ebertsankey related provisions and impairments
Alignment program
82,7
-14,0
14,5
28
107,1
Q1 2017 | 15
INTANGIBLE AND TANGIBLE ASSETS
EUR million
Mar 31
Mar 31
Dec 31
2017
2016
2016
526,0
540,6
540,6
-2,0
-8,3
-1,3
2,1
1,0
Intangible assets and goodwill
Book value, Jan 1
Currency translation adjustment
Additions
6,3
Divestments
Amortization and impairment
-5,9
-3,1
-3,0
0,1
0,1
0,1
523,0
530,5
526,0
1,2
2,0
Book value, Jan 1
164,6
162,4
162,4
Currency translation adjustment
-19,6
-3,3
-2,7
5,7
7,2
33,4
Depreciation and impairment
-5,9
-5,8
-23,7
Decreases and transfers
19,8
-0,3
-4,6
164,7
160,1
164,6
6,0
11,7
7,4
Mar 31
Mar 31
Dec 31
2017
2016
2016
Decreases and transfers
Book value at end of period
Investment commitments for intangible assets
-13,9
Tangible assets and investment property
Divestments
Additions
Book value at end of period
Investment commitments for property, plant and equipment
NON-CURRENT ASSETS HELD FOR SALE
EUR million
-0,1
Tangible and intangible assets
5,6
Inventories
Other assets
Total non-current assets held for sale
5,6
Interest-bearing liabilities
Provisions
Other non-interest bearing liabilities
2,7
Total liabilities directly associated with the non-current assets held for sale
2,7
There were no non-current assets held for sale at the end of March 2017 and December 2016. Non-current assets held for sale at the end of
March 2016 included land sold in the acquired English & Crystal Living business during 2016.
CONTINGENCIES AND PLEDGED ASSETS
EUR million
Mar 31
Mar 31
Dec 31
2017
2016
2016
116,5
90,7
116,6
20,9
18,5
19,1
As security for own commitments
Lease commitments
Guarantees
Other contingencies*
Contingencies and pledged assets total
14,6
17,5
15,3
152,0
126,7
151,0
*Other contingencies include a commitment of USD 15 million to invest in private equity funds.
Q1 2017 | 16
Tax risks
Fiskars Group entities are subject to tax audits in several countries. It is possible that tax audits may lead to reassessment of taxes.
In July 2016 Fiskars received a tax reassessment decision from the Finnish Large Taxpayers’ Office, which obliged the company to pay in total
EUR 28.3 million in additional tax, interest expenses and punitive tax increases as a result of a tax audit carried out in 2014.
Fiskars and its external advisors consider the decision unfounded and did not recognize the related taxes and other costs in the income
statement. Fiskars has appealed the decision to the Board of Adjustment in the Finnish Large Taxpayers' Office. Fiskars will continue the appeal
process in court, if necessary, in which case the process may take years. The dispute concerns intra-group loans forgiven by the company in
2003 and their tax treatment in subsequent tax years.
DERIVATIVES
EUR million
Mar 31
Mar 31
Dec 31
2017
2016
2016
222,5
366,8
212,0
80,0
93,4
80,0
0,4
1,4
0,4
Nominal amounts of derivatives
Foreign exchange forwards and swaps
Interest rate swaps
Electricity forward agreements
Fair value of derivatives
Foreign exchange forwards and swaps
-0,9
2,7
1,3
Interest rate swaps
-1,2
-2,2
-1,6
0,0
-0,4
0,1
Electricity forward agreements
Derivatives have been valued at market value.
EXCHANGE RATE SENSITIVITY OF THE OPERATIONS
Less than 20% of Fiskars’ commercial cash flows are exposed to fluctuations in foreign exchange rates. The most significant risks relate to the
appreciation of THB and GBP against EUR and depreciation of JPY, AUD and SEK against EUR. The following table presents the estimated
annual net commercial cash flows in the most significant currencies:
EUR million
THB
JPY
AUD
SEK
CAD
IDR
GBP
USD
Operational currency position
-37,7
24,6
26,0
23,2
16,7
-15,3
-10,8
1,5
3,8
-2,5
-2,6
-2,3
-1,7
1,5
1,1
-0,2
Exchange rate sensitivity of the operations*
*Illustrates the impact of 10% depreciation of the currency against EUR on the Group's annual profit before taxes had the cash flows not been
hedged.
Most of the foreign exchange risks related to the commercial cash flows are hedged primarily through the use of currency forwards and swaps.
As Fiskars does not apply hedge accounting to these currency derivatives, both the realized and unrealized gains and losses on the derivatives
are included in the income statement.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Mar 31, 2017
EUR million
Investments at fair value through profit and loss
Other investments
Level 1
0,4
Derivative assets
Total assets
Level 2
545,7
Level 3
Total
19,9
565,6
8,3
8,7
0,1
546,1
0,1
0,1
28,2
574,4
Derivative liabilities
2,1
2,1
Total liabilities
2,1
2,1
Mar 31, 2016
EUR million
Investments at fair value through profit and loss
Other investments
Level 1
0,4
Derivative assets
Total assets
Level 2
494,3
Level 3
Total
15,7
510,0
7,5
7,9
2,7
494,7
2,7
2,7
23,2
520,5
Derivative liabilities
2,6
2,6
Total liabilities
2,6
2,6
Q1 2017 | 17
Dec 31, 2016
EUR million
Level 1
Investments at fair value through profit and loss
Level 2
464,4
Other investments
0,4
Derivative assets
Level 3
Total
20,4
484,8
9,3
9,7
29,7
495,8
1,4
Total assets
464,8
1,4
1,4
Derivative liabilities
1,6
1,6
Total liabilities
1,6
1,6
Fair value categories
Hierarchy level 1 includes financial assets that are publicly quoted in an active market. Level 2 includes financial assets and liabilities measured
using directly observable market inputs. All interest-bearing debts and derivatives fall within this category. Level 3 includes financial assets and
liabilities measured using non-market observable inputs. The asset classes in this category are unlisted equity investments and funds.
Investments
EUR million
Book value, Dec 31, 2015
At fair value through profit or loss
Other
Level 1
Level 3
Level 1
Level 3
Total
520,0
14,9
0,4
6,6
541,9
Additions
3,7
3,7
Change in fair value
-25,7
-3,0
0,0
0,9
-27,8
Book value, Mar 31, 2016
494,3
15,7
0,4
7,5
517,9
1,8
5,3
Additions
Decreases
Change in fair value
Book value, Dec 31, 2016
3,5
-61,7
-0,7
31,8
1,8
464,4
20,4
Additions
Book value, Mar 31, 2017
33,7
0,4
7,2
Decreases
Change in fair value
-62,4
9,3
494,5
-1,0
-0,7
6,3
-0,7
81,3
-7,0
-0,0
545,7
19,9
0,4
74,2
8,3
574,3
Investments at fair value through profit or loss comprise listed shares and unlisted funds. Listed shares have been recognized at their fair value
based on quotation at the end of the reporting period (fair value hierarchy level 1). Level 1 investments consist mainly of 10,881,781 shares in
Wärtsilä with a fair value of EUR 545.7 million. A 10% change in the Wärtsilä share price would have an impact of EUR 54.6 million in the results
before taxes. Risk associated to investments into short interest rate funds are considered to be low. The fair value of unlisted funds is based on
the market value reported by the fund (level 3). Changes in the fair value are recognized in the income statement.
Other financial assets comprise listed and unlisted shares as well as non-current receivables. Listed shares have been recognized at their fair
value based on quotation at the end of the reporting period (level 1). Unlisted shares and other investments are measured at the lower of cost
and fair value (level 3).
Q1 2017 | 18
ACQUISITIONS AND DIVESTMENTS
The following acquisitions and divestments have an impact on the comparability of figures.
Acquisitions and divestments in Q1 2017
There were no acquisitions or divestments during Q1 2017.
Sale of the boats business in 2016
Fiskars sold its boats business to Yamaha Motor Europe N.V on January 4, 2016. The transaction included the sale of shares in Inha Works Ltd.
as well as the sale of the Buster brand and related factory real estate in Ähtäri, Finland. In 2015, boats business net sales amounted to EUR 35
million.
Sale of the container gardening business in the U.S. in 2016
Fiskars Brands, Inc. sold its container gardening business in the U.S. to Bloem, LLC on January 22, 2016. The transaction included the sale of
the container gardening brand American Designer Pottery and related manufacturing and distribution facilities in Apopka, Florida, U.S. In 2015,
container gardening net sales amounted to EUR 23 million.
Divestment of two businesses in September 2016
In September 2016, Fiskars entered into an agreement to divest its European Ebertsankey container gardening business to Good(s) Factory BV,
a member of the Elho Group, European market leader in synthetic pottery and related products. The divestment was completed in December
2016. In addition, Fiskars sold Spring USA, the U.S. based provider of foodservice equipment, to an affiliate of ShoreView Industries.
In the full year 2015, the net sales of Spring USA and Ebertsankey were in the aggregate EUR 26 million and operating profit EUR 3 million. The
divestment of Spring USA generated a positive effect on cash flow during the third quarter of 2016. The divestments did not have a significant
impact on Fiskars’ financial position or result during 2016.
Q1 2017 | 19